Dowlais Group (DWL) Trading Update summary

Trading performance and financial highlights

• Q1 2025 adjusted revenue was £1.3 billion, a 2.5% year-on-year decline at constant currency, with a 3.9% decline including FX headwinds.

• Adjusted operating margin improved by 80bps to 6.6%, driven by restructuring and performance initiatives.

• Automotive revenue declined 1.5% year-on-year, with Driveline down 6.6% and ePowertrain up 3.9%.

• China joint venture revenue rose 11% year-on-year, aided by ePowertrain growth.

• Powder Metallurgy revenue fell 5.7%, with margin down 150bps to 8.3% due to lower volumes.

Market environment and outlook

• Macroeconomic uncertainty increased due to new U.S. tariffs on the automotive sector.

• S&P revised 2025 industry outlook to a 3.3% decline in light vehicle production ex-China and 1.7% globally.

• Full-year performance now expected at the low end of guidance: flat to mid-single digit revenue decline, margin 6.5%-7.0%.

• Adjusted free cash flow expected to be lower than prior year due to volumes and restructuring costs.

• Tariff cost recovery expected to be second-half weighted, with weaker H1 and stronger H2 performance.

Strategic and operational updates

• Continued execution of global footprint restructuring and performance improvement actions.

• Proposed combination with American Axle progressing well, aiming to create a more resilient business.

• Interim results scheduled for announcement on 7 August 2025.